On Strickland's School Funding "Fix"

Up until now, I've defended Gov. Ted Strickland on school funding. Yes he promised to fix the system and no he didn't offer a fix in the first budget cycle. But it made sense for him to get on top of things and wait until after the midterms before rolling out a major initiative like that. So yesterday was it. The big fix. Here we go. And . . . not so much.

Strickland's promise, at least as proposed in his state of the state speech, is twofold. First, he promises to generally increase the state share in some manner, so the state is paying an average of 59% of K12 costs. Second, he offers a couple of phantom revenue fixes.

We won't know the particulars of the state funding until the budget is released next week, but conspicuously absent from the SoS speech was any promised reform that would make the funding changes systemic. While bumping up state funding is a good idea, it depends on Ds remaining in power. After the Supreme Court relinquished jurisdiction over the DeRolph case, the General Assembly began whittling away the gains in state funding. It's hard to get too excited about a "reform" that can as easily be undone.

More disturbing is the phantom revenue fix. For a review of what phantom revenue is, check this previous post. Strickland's proposal for a state fix is to tinker with the local share charge-off. Here's the excerpt from the speech:

In the current system, when the state calculates how much tax revenue a school district has, the state uses phony numbers. You may have heard this called ‘phantom revenue.’ For example, in many school districts, rising property values do not produce additional property tax revenue. But the state formula for school aid assumes districts do get additional tax revenue. That’s not logical, and it results in many districts being punished because the formula says they have an abundance of phantom dollars that don’t actually exist.

Under my plan, the state will no longer ask school districts to pay their bills with phantom dollars.

Instead, my plan lowers what our local taxpayers are expected to contribute to local schools from 23 mills to 20 mills. The state will assume responsibility for providing the difference between what those 20 mills raise and the cost of the full range of educational resources our students need according to our evidence-based approach.

OK, a couple of thing here. First off the 20 mill/23 mill business refers to a problem, but not the one Strickland describes. Here's what he's addressing. For a school district to receive state aid, it must have a twenty mill levy in place. Also twenty mills is the floor past which H.B. 920 will not reduce the millage further. So if a school district is down to twenty mills, those mills grow if property values grow. As a result many rural districts with low value tax bases live at twenty mills and do what they can do.

Meanwhile, the local share charge off (the amount the state deducts from its allocation as an estimate of what a district can provide) is the taxable property value times 23 mills. So by appearances the formula starts by assuming that local districts will provide 20 mills, but then takes back three mills by the time we get to the local share chargeoff. Whether the payout actually assumes 20 mills is open to debate, but the fact that the two different figures appear in the formula certainly don't bolster it's perceived credibility.

So Strickland is now reducing the local share chargeoff to 20 mills. That's certain better for districts stuck at twenty mills. The problem is that any time you tinker with the local share you run a high risk of windfalling the wealthiest districts. Everyone gets their tax base times three mills. Since Hudson's tax base is far higher than, say, Federal Hocking district in Athens county, Hudson will get far more state money than Fed Hock.

After all this time, I expected something better than a fix that disproportionately benefits the districts that need it the least. And this is before we even get into the yet- unanswered questions about where the money will come from.

As to the last bit of the phantom revenue fix -- allowing taxpayers to pass levies that grow with property values -- I need a bit of research time.

State of the State, First Impressions.

Kind of like going to the grocery store with your dad and, after he spends the trip there lecturing about how times are tough and the family has to save money, he loads the cart with steak and seafood and puts it all on the Visa.

More to come after I recover from removing a small glacier from my driveway.

Waiting for Strickland's State o' the State

Tomorrow Gov. Ted Strickland delivers his State of the State address. Aside from the obvious (everyone's economy is now in the tank with ours! w00t!), the Governor is expected to offer at least the beginnings of his school funding fix.

While Strickland made the smart move waiting to this point for obvious political reasons, the economic mess has left him with little room to maneuver. Nonetheless, he's committed at this point. Here are some possible proposals and some of what they might mean.

• A new methodology for calculating support. This is suggestion of a new KnowledgeWorks report and plenty of others before that. Right now the state uses a formula that supposedly determines how much each school district needs, but each budget cycle the General Assembly reverse engineers the total amount of support so that it looks a lot like the amount they want to spend as opposed to the amount they actually need. The problem with a new formula is it still doesn't tell us where the money comes from.
  
• A tax shift. The basic deficiency in the current system is the overreliance on local revenue. The most basic form of school funding reform would be to raise some statewide tax -- a sales tax for instance -- dedicate the revenue to k12 education and simultaneously reduce local property taxes. Even a tax shift would be a hard sell in this economy, but it's hard to imagine a serious reform proposal that doesn't feature one.
• H.B. 920 Rewrite. The other recent think tank proposal is revisiting the no-growth rule first past in House Bill 920, then ultimately enshrined in the state constitution. By law a local school levy millage is reduced every year in order keep the amount of money charged each property static. Problem is that a fix would require a constitutional amendment. Granted, it's easier to sell growing levies at a time when property values aren't going up. On the other hand, it's a lot of political capital to spend on something that wouldn't offer much immediate help to schools.
• Gutting State Board Authority. Strickland proposed last year rewriting the State Board duties to make it essentially an advisory board. I could offer at least a post about how horrible Board is, just from governmental structure standpoint, not to mention how, um, unevolved some of its decision making has been. Now that he has some of his appointees on the Board, we'll see if he floats the idea again.
• Consolodation. Strickland has floated signals before that he would like to see something in the way of consolodating functions, if not districts. This is the sort of big fix for efficiencies that would sell best in a fiscal crunch.
• Union Concessions. When Taft put together his Blue Ribbon Commission, one recommendation was a state health insurance pool, as opposed to letting the unions bargain with each district. The savings would be significant, but the unions like being able to bargain about health care -- it gives them something of a reason for being. If Strickland is proposing pain on the administration side and pain (or at least tradeoffs) on the part of taxpayers, he may resurrect this idea or one like it to spread the pain.

This list is by no means exhaustive and is only based on ideas that have floated around for as long as I've been watching school funding. No inside info hear. If I'm able to liveblog the SOTS (or lets just call it SoS and be done) look for that. But with a possible snow day tomorrow, no promises.

Inaugeration Day

For those of you still in Akron and out of the Dem loop, the hot ticket today is a watch party co-sponsored by Reps Betty Sutton and Tim Ryan at the Akron Civic. Details here.

My teaching schedule neatly coincides with the event, so no tweets or liveblogs around here. I have it on DVR, so maybe some reaction later.

Enjoy.

They Love Me in France

Just picked this up on a Technorati RSS feed. Apparently a French blog found the our coverage from 2006 when Obama met les bloggeurs at the ODP dinner and translated. Also posted on of Cindy's photos, labelled "Pho et Obama." My long gone college French can't tell me how good the translations is.

The photo reminds me of one many great things about the evening; for once I wasn't the guy at the table with freakishly long fingers.

Coughlin Running for Guv.

In lieu of one of my mewling post about sorry I've been away and now the blog is back, let's just jump into it.

To no one's surprise (least of all followers of the Pages) term-limited State Senator Kevin Coughlin has announced his candidacy for Governor. Given the number of other term-limited R's looking to take a run at Ted, Coughlin at this point has to be considered a longshot.

What intrigues me is how ugly the resultant primary may be. One need not search far to find the rumors about Coughlin. Up until now he hasn't had to concern himself much as he hasn't had opponents either sufficiently well-funded or sufficiently mean-spirited to perform and use that sort of opposition research. Plus the rumors are the sort that Dems have a hard time getting worked up over.

But that all changes once he's in a statewide race with other Republicans. And with Alex Arshinkoff looking to settle scores to boot.

Oh yes, the Arshinkoff factor. Coughlin failed in his bid to bring Alex down. And while the anti-Alex activists could point to his supposed losing streak before the election, it's hard to do so after this past election. As he has done in the past, Alex rocked the non-partisan elections, which is to say he did about as well as any Republican chair in a Dem county in a Dem year could do.

So. Coughlin in a state-wide primary. A resurgent Arshinkoff looking for payback.

Pass the popcorn.